*USPS BOG Approves Equipment Upgrades

The U.S. Postal Service's Board of Governors yesterday approved funding to improve letter- and parcel-sorting equipment capabilities in an effort to reduce labor costs and save $250 million over the life of equipment.

The board approved the funding at its monthly board meeting in Reno, NV.

William J. Dowling, USPS' vice president of engineering, who outlined the initiatives, said the upgrades will shift 450 million pieces of mail from expensive manual sorting operations to postal automation. The upgrades will begin in September 2001 and will be completed by April 2002.

"Only about 8 percent of the letter mail we receive each day is processed manually, yet it accounts for one-half of letter mail processing staff costs," Dowling said. Manual sorting costs more than $50 per thousand letters, while automated processing costs one-tenth that amount, he said.

Dowling said the upgrades will include equipment modifications to Delivery Bar Code Sorters and Carrier Sequence Bar Code Sorters, which sort mail down to the delivery route and the order of delivery sequence. The upgrades will allow these sorters to automatically sort both thin and thick mail, which is currently not possible.

For example, existing automated letter mail sorting is limited to envelopes not exceeding a height of 6.25 inches, a thickness of 0.31 inches and a weight of 3.3 ounces. By summer 2002, mail pieces up to 6.5 inches in height, 0.50 inches in thickness and 6 ounces in weight will flow through postal automation.

Other upgrades will increase productivity and capacity on small parcel and bundle sorters.

The board also approved funding to purchase 2,403 2-ton mixed delivery and collection vehicles. The vehicles are approximately the size of commercial bread trucks and are larger than those typically used by letter carriers. The trucks will be used primarily for mail collection services, expedited delivery and parcel post operations. The purchase will replace 2,200 old vehicles, provide 200 additional vehicles to meet fleet growth requirements, and provide three vehicles for training. As a result, the agency's 2-ton-vehicle inventory will increase from 7,184 to 7,387. The USPS' total fleet consists of approximately 209,000 vehicles.

Also at the meeting, John Nolan, deputy postmaster general, said that labor negotiations with the National Postal Mail Handlers Union will begin tomorrow, and that talks with the American Postal Workers Union will start Aug. 22. Negotiations with the National Rural Letter Carriers' Association will start Sept. 6. The unions will renegotiate their contracts, which are due to expire this fall.

"It will be our task over the next few months to work cooperatively … to craft an agreement that is good for America, good for postal employees and good for the postal service," Nolan said.

Senior USPS officials also formally announced plans at the meeting to offer a hybrid "electronic-to-hard-copy" service dubbed Mailing Online. The service allows small-business customers using personal computers with Internet access to create, print and send a hard copy mass mailing directly from their desktops.

The service will be in a three-year testing mode and will begin Sept. 1.

Mailing Online permits customers with computers to upload electronic documents -- accompanied by a mailing list of up to 5,000 recipients -- to the USPS. The USPS securely forwards the file to a printer near the mailing's intended destination and deposits the finished product in the mail stream. Mailing Online is designed for customers who mail in quantities ranging from a few dozen to a few thousand mail pieces.

The agency said this month that it has contracted with printing companies to handle the printing, addressing, stamping, sorting and transporting of the documents after they have been sent electronically to the postal service.

Pricing for the Mailing Online service has not been approved yet. The proposed price is 41 cents for a two-page document with all labor and materials included.